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Yahoo’s stake in Yahoo Japan is often cited as one of its most valuable assets, and indeed Yahoo is considering selling it as a quick fix to appease angry shareholders in the U.S. While Yahoo seems to be treading water in the US, Yahoo Japan is sitting on top of the Japanese web industry. In fact, Yahoo Japan’s market cap at the Tokyo stock exchange is hovering at around $22 billion, compared to Yahoo’s current $27 billion. Fiscal 2007 marked the 11th consecutive year of profitability and record revenues: Yahoo Japan’s sales grew 23.3% to $2.4 billion (Yahoo in the US: $7 billion) on a year-to-year basis, with a net income of $570 million (US: $660 million).

With 46 million monthly unique visitors, according to comScore, Yahoo Japan reaches 82 percent of all Internet users in the country. That compares to 26 million monthly uniques (or a 46 percent reach) for Google in Japan. (In the U.S., the two are neck and neck, with Yahoo drawing 138 million monthly uniques, and Google 133 million). Alexa also has been ranking Yahoo Japan at No. 1 for years now.

It’s no exaggeration to say that for millions of light users in Japan, the Yahoo portal site is almost synonymous with the web itself. Here are three major reasons (and possible hints for other web companies wanting to expand internationally) for this dominance:

1. Get a Headstart and Help From a Local Powerhouse
Yahoo Japan incorporated in January 1996, just 11 months after its parent company did (Google waited 3 years to open a Tokyo office in 2001).

Currently, Yahoo Japan is owned 40% by local telecommunications powerhouse SoftBank and 33% by Yahoo in the US, demonstrating a textbook perfect Japanese-foreign joint venture structure.

SoftBank’s founder Masayoshi Son, Japan’s richest man (who says his company one day will rule the global web), doubles as Yahoo Japan’s chairman. The site is also the default starting page for SoftBank’s 15 million mobile web (“Yahoo Keitai”) subscribers.

2. Super-Localization Is the Key
In terms of structure, design and scope, Yahoo Japan is significantly different from the US site (see screenshot). The site may look cluttered to Non-Japanese eyes, but users in Nippon prefer (if not even expect) these crammed starting pages.

Yahoo Japan is split into 11 differentiated business units, i.e. search, auctions, member and regional services, media, mobile, lifestyle etc.

What’s particularly interesting from an American perspective is that almost nobody in auction-crazy Japan knows Ebay although the company opened a Tokyo office as early as October 1999 (Yahoo Japan Auctions started just one month earlier). Ebay finally gave up in 2001 but came back in late 2007 with Sekaimon, an intermediary enabling Japanese users to access Ebay with their Yahoo Japan IDs and through translated menus.

Yahoo Japan Auctions boasted a transaction volume of $6.5 billion in fiscal 2007 (mobile and fixed Internet), whereas American users can’t sell off stuff on Yahoo anymore since June 2007.

Additional services exclusive to Yahoo Japan include Yahoo Videocast (a video portal for cell phones and PCs), the Digg clone Minna no Topikkusu (Everybody’s Topics), Yahoo Days (a social network) and Netallica (an entertainment news sub-site).

The company offers a number of mobile- and Japan-only applications and is also involved in the Internet banking business.

3. Do Business The Japanese Way: A Finger In Every Pie
Over the years, Yahoo Japan diversified into an influential web, telecommunications and media conglomerate, now encompassing dozens of consolidated subdiaries and affiliates: It merged with and acquired advertising firms, information processing companies, marketing research providers, map software makers etc.

The company has managed to build up a Japanese identity by

• employing 3,500 people in one of Japan’s most prestigious office complexes
• foraying into Japan’s multi-billion dollar TV business with the development of widgets for digital TV programs and “Yahoo Japan for Aquos”, a Sharp TV-optimized version of the site with future plans for video distribution
• establishing Yahoo BB, one of Japan’s first ISPs to offer low-cost, fixed-charge price plans for broadband connections
• launching a sponsored service, which enables users to read a number of print magazines online and free of charge (stirring up the notoriously conservative local publishing business)
• buying the naming rights for the Fukuoka Dome (now Fukuoka Yahoo Japan Dome), a major baseball stadium in Southern Japan
• partnering up with other local web companies such as video portal Nico Nico Douga, Myspace Japan (i.e. for the distribution of Japanese music news) and mobile application provider jig

The strategy of total Japanization paid off for the company (which is even an official sponsor of the country’s Beijing Olympic Team). There are few serious competitors on the horizon which could endanger Yahoo Japan’s premier position, at least not in the foreseeable future. Is Yahoo Japan an anomaly, or is it a model of how to go international on the Web?

Yahoo Japan versus Google Japan

Yahoo U.S. versus Google U.S.

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Yesterday we reported on Ning’s termination of its most popular premium widget developer, WidgetLaboratory. Ning removed all WidgetLaboratory widgets from its platform without warning, and in doing so broke many of the social networks that had been created by its members. The decision was met with a backlash from the Ning community, as many members had spent hundreds of hours and dollars perfecting their homespun social networks.

Ning says that WidgetLaboratory has broken the platform’s Terms of Service, but refuses to specify what violation it has committed (though we have heard that WidgetLaboratory had been warned multiple times). This may be the case, but Ning neglected to warn any of its members that the change was coming, leaving many of its top networks in shambles.

Today, WidgetLaboratory has decided to hit back. The company has written a blog post stating that it is open sourcing all of its widgets, many of which were formerly only available for a monthly fee, to allow users to get their networks back up and running. Users will be free to add, modify, or improve on each widget as they wish. The post also announces WidgetLaboratory’s free migration tool, which will allow Ning users to pull content from their social networks should they wish to move elsewhere.

The migration data will be available for users to use as they wish, but WidgetLaboratory plans to help users find open source alternatives to Ning where they will be able to set up shop (WidgetLaboratory won’t have anything to do with actually hosting or managing the networks).

I spoke at length with Spencer Forman, CEO of WidgetLaboratory. Forman says that Ning has only specified one violation in its terms of service - network degradation - and that Ning is simply being anti-competitive. He explained that they have had similar network quality complaints from Ning in the past, but that oftentimes it was actually a fault of Ning’s servers or setup, and not WidgetLaboratory’s (he will be releasing a full record of email and phone exchanges to support his claims). Finally, he says that Ning was uncomfortable with WidgetLaboratory’s success (the widget maker may have been collecting as much revenue as Ning itself), and that any other explanation is a smoke screen.

It’s obviously highly unlikely that network degradation is the true reason for WidgetLaboratory’s removal (though we only have Forman’s word to go by that it’s the only claim Ning made against him). In any case, the bold move to open source the widgets puts Ning in a bind. If the site bans the widgets, users will skim through the code to find anything that could be in violation. If Ning lets them stay, then obviously the network issues can’t have been the real motivation behind WidgetLaboratory’s removal in the first place.

Update:
Earlier today Ning posted a response to some of the issues. Ning will be implementing a number of features to replicate the widgets in the next few weeks, and will try to take measures to a prevent any future lack of communication. Here’s an excerpt of how they will deal with such ToS violations in the future:

…Namely, if we have had to warn a third party developer, we want to provide some general way of letting you know about it before we remove them from the Ning Platform… Now, I can’t guarantee that we’ll always be able to do this. There are times when a third party developer’s actions require immediate attention and removal. We will always put the needs of the Ning Platform as a whole ahead of functionality on any individual network.

Frankly, this is pretty lame. There’s already a pretty general way to notify users that you’re stripping a portion of their site: Email (blog posts work too). I’m not defending WidgetLaboratory, because it’s unlikely that we’ve got the whole story, but Ning should have done something to warn its users.

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Earlier this week I had the chance to sit down and meet with a few members of the Brightcove team, including founder and CEO Jeremy Allaire. We discussed the direction that online video was taking and the stratification seen between consumer and professional markets. And perhaps most interestingly, Allaire was willing to discuss the failures that Brightcove (and the online video space as a whole) has had to grapple with.

Since its launch in 2005 Brightcove has accrued customers spanning television, print media, and the music industry, who use the service to manage their online video content. The company has also seen a rapidly growing base of customers from more unlikely verticals, including biotech the pharmaceutical industry. And the service has seen explosive growth abroad, with foreign markets now accounting for 20% of the company’s revenues after only one year.

But despite the company’s success, there is still widespread confusion as to what Brightcove and other video platforms actually do. For years, many people have lumped services like Brightcove alongside consumer portals like YouTube and Metacafe, but the two represent entirely different markets.

In reality these services have little in common besides a Flash-based movie player. Brightcove and its competitors offer a cloud-based software service that caters to the professional market, essentially allowing companies to outsource their online video component. This extends beyond just a media player - Brightcove also manages advertising analytics, ensures that content is properly “plugged in” to the rest of each customer’s site, and offers a set of content management and programming tools. Conversely, YouTube et al. are geared towards amateurs looking for a place to easily put their content on the web.

Much of the confusion stems from semantics - both sets of services could be called “video platforms”. That said, Brightcove is also partially responsible for the confusion, as it actually did used to offer a YouTube-esque consumer site called Brightcove.TV that was put on the backburner in late 2007. The company has since shifted its full attention to its B2B offering.

While Brightcove has seen more than its share of success, underperformers like Brightcove.TV have made it clear that online video may not developed exactly as the company hoped it would. When the market first began to take off, there was a widespread belief that millions of prospective amateur content creators would be able to monetize their videos, driving a massive stream of long tail revenue. Allaire says that this has largely failed to materialize - while there have been some successful video creators, the concept of a long tail video market simply hasn’t become a viable business.

Another area where online video distribution is largely failing is in the transition from the computer to the television. Allaire explains that he envisions a “democratization of video” that hasn’t happened, largely because of proprietary formats and licensing issues that have plagued the industry. Because there is little Brightcove can do to address the issue, Allarie has written an open letter to the consumer electronics industry, but it’s unlikely we’ll see the open standards we all long for any time soon.

Finally, Allaire acknowledged that the idea of for-pay online content has been largely a failure (though he says this is less of a disappointment). Brightcove invested heavily in producing a platform for paid media content, but the market for this hasn’t materialized. He says that even well received marketplaces like Apple’s iTunes TV and Movie stores have seen disappointing results, and we probably won’t see a wider adoption until the consumer electronics industry breaks down the aforementioned barriers.

Over the next few months, Brightcove will be rolling out its gutted and rebuilt third revision to the public (the new version is currently in a private beta). From there, Allaire predicts that the site will continue to make inroads internationally and with with less “conventional” media creators as more companies turn to video platforms to handle even occasional content posts. Other players in the video platform space include Maven Networks, Move Networks, Delve Networks, and Ooyala.

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Amazon confirmed our speculation that they are planning to target colleges and universities with a new version of the Kindle, reports the Seattle PI. Textbooks are a $5.5 billion annual market, and most publishers now offer electronic versions of their textbooks. McGraw-Hill Education, for example, publishes 95% of their books electronically as well as in print. But there is no compelling device to read them on. The new Kindle will likely be a large screen version of the original, which is much better suited for textbooks.

Amazon also downplayed our estimates that 240,000 Kindles have been shipped since launching last November. Citi analyst Mark Mahaney later increased his sales estimates as well.

Amazon officials gave McAdams Wright Ragen analysts the impression that high-end estimates on Kindle sales reported by TechCrunch and a Citigroup analyst are not reasonable. (See a previous blog post on the topic here and here.)

Amazon managers “told us that the Kindle is definitely selling very well, but they also said the analysts and reporters giving out these extremely high estimates ‘did not run them by company,’” Bueneman wrote.

We’re sticking by our sources on the estimates of units shipped from the factories in China. Amazon is correct that we didn’t “run them by company” prior to publishing, but since they don’t comment on non-public sales figures, it wouldn’t have been a useful exercise anyway.

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With just the weekend between now and the start of the major party conventions, the amazing thing about the New Media is just how little it has impacted so far on the story. No major leaks about the vice presidential nominations, no blogger unmaskings of damaging revelations about the candidates at the top of the ticket, no shaky video of loose talk or surrogates jockeying for position.

Is is possible that the campaigns have learned how to contain the new viral media, or is something else going on? With Twitter, Qik, FriendFeed, and other social media platforms now in place and largely battle-tested for the coming storm of pre-baked circuses, why is the news so tightly controlled by the traditional networks?

Perhaps the nature of the underlying story of this election undercuts the technology equation. With a disruptive candidate like Barack Obama, people are looking to the media for less, rather than more drama. The shiny object fascination with radical technology change has given way to a more pragmatic mood, where iPhones have become commonplace and the rapid spread of information throughout the day and on the move has let the mainstream media play more to its traditional strengths as not just aggregators but synthesists of the news.

Real time bursts of information over Twitter and IM have changed how we react to events; the edge professionals have with insider notification is being smoothed out and delivered as a service to consumers via intermediaries who give away the data for the ongoing relationship. We use Facebook and other social hubs as early warning systems, insurance against being out of the loop when breaking information makes a difference in how you do your job or finding one.

Read the rest of this entry at TechCrunchIT

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A team of Microsoft Researchers have released a Facebook application designed to explore metadata and the logic related to tagging. The app, called Collabio (a combination of collaboration and biography) is a basic game that asks users to tag each other with descriptive keywords.

At first glance, Collabio’s Facebook app doesn’t seem to be anything special. Users simply guess what keywords best describe their friends, and if their answers match those left by others, they get more points - there are a number of other games available on the platform that do nearly exactly the same thing.

But while most of these applications simply toss the input into a database, Microsoft’s reasearch team has much greater aspirations. In a news bulletin on the project, the team explains that the project may help develop advancements in “personalization or expert matching”, serving as an experiment in both psychology and social interaction. You can see the progress of the experiment here.

The new project further strengthens the bond that Microsoft and Facebook have forged with eachother, which has included massive search and advertising deals. Of course, Collabio doesn’t see any money changing hands, but you probably won’t see a MySpace version any time soon.

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